Benjamin Franklin is acclaimed for many reasons – as one of the Founding Fathers of our fine country, as an inventor, as a diplomat, as a scientist – just to name a few.  But for tax attorneys, particularly those who focus on wealth and estate planning, he is namely cited for his poignant statement that “…In this world nothing can be said to be certain, except death and taxes”  – a statement first made by Franklin in a letter to Jean-Baptiste Leroy in 1789 which still holds great truth some 220 years later.  Some things never change.

Humans are distinct from other living beings in many ways, but none more distinct than the insistent knowledge that we will eventually die.  This is a fact that no one likes to spend time contemplating, whether able-bodied and enjoying a healthy life, or in the throes of illness or advanced age.  But the fact is that we all must deal with our mortality on many levels including the practical level of planning our estate.

Maintaining the ability to determine who should enjoy the benefit of your life’s work, what individuals and charitable organizations should receive the bequest of your assets – regardless of whether these assets are small or grand in terms of the actual financial worth – this is a representation of your life and you should choose how it is all distributed.

There are many reasons why estate planning is critically important, but the choice involved with naming your beneficiaries is of primary importance to most people.   So in addition to saving on potential taxes, and limiting the costs and attorneys’ fees associated with the estate process, you can also afford your loved ones the ability to mourn your loss without being simultaneously burdened with unnecessary tasks and confusion by taking very basic preliminary steps.

A simple last will and testament can satisfy this primary issue and more sophisticated documents and planning mechanisms can satisfy more sophisticated tax planning needs.  But to ensure that your legacy and the fruits of your life’s work are handled according to your wishes, a simple estate plan is a must for everyone.  While we cannot control death or taxes, we can certainly take the steps that are available to ensure that we control how our legacy will ultimately be handled.  And with that comes a priceless peace of mind.

Please let us answer your questions and assist you with this critical task.  Call to schedule a consultation with Ms. Hoffman, the head of our Wealth & Succession Planning practice group.

Denise D. Hoffman is a Partner with Mastin Hoffman & Crews LLC.  Ms. Hoffman can be reached at 303.217.4876, or  via email at denise@mastinlaw.com.

We are proud to have her as a member of our team!

]]> http://www.mastinlaw.com//media/news/nicole-r-nies-joins-the-firm-as-partner/feed/ 0 http://www.mastinlaw.com//media/news/denise-d-hoffman-and-s-kato-crews-to-serve-in-leadership-roles-for-cobalt-2012/ http://www.mastinlaw.com//media/news/denise-d-hoffman-and-s-kato-crews-to-serve-in-leadership-roles-for-cobalt-2012/#comments Mon, 24 Oct 2011 21:49:22 +0000 admin http://www.mastinlaw.com/?p=1046 We are proud to announce that Denise D. Hoffman and S. Kato Crews will continue to serve in leadership roles for the prestigious 2012 Colorado Bar Association Leadership Training (COBALT) program.

The mission of COBALT is to enhance, promote and inspire the leadership of the legal profession.  COBALT brings together lawyers from different practice areas with a variety of experiences from across Colorado.  These lawyers are acknowledged leaders of the profession and their communities.  COBALT builds upon their leadership skills and promotes new leadership experiences.  This six-month program consists of an initial retreat and six day-long workshops on substantive issues.

Ms. Hoffman is a graduate of the 2009 COBALT class, and served as the Chair of the 2011 COBALT program.  She will continue her leadership role by now serving as the Chair of the COBALT Strategic Planning Committee.  Her committee will focus on the development of ongoing opportunities for the growing COBALT alumni to leverage the collective skills and the dedication to community and profession that COBALT alumni offer.

Mr. Crews is a graduate of the inaugural 2007 COBALT class.  He served on the COBALT Programs Committee in 2008, and has served as the COBALT Gathering Facilitator for each class since 2009, and will again serve in this capacity for the 2012 class.  Fondly referred to by COBALT alumni as the “COBALT Whisperer,” Mr. Crews leads a gathering of the COBALT class after each programming session where he and the class ruminate over leadership concepts and ideals conveyed during each program.

For more information about COBALT, please click here:  http://www.cobar.org/index.cfm/ID/20238/DPWLT/COBALT/

For information, please visit the ABA General Practice, Solo & Small Firm Division 2011 National Solo & Small Firm Conference website:

http://ali-aba.org/index.cfm?fuseaction=courses.course&course_code=CT040#planningchairs

In one of the most significant employment-law rulings from the Colorado Supreme Court this year, the state high court held that an at-will employee’s continued employment is sufficient consideration to support a noncompetition agreement signed by an employee after his or her initial hire. The Court’s decision reverses a previous decision by the Colorado Court of Appeals which held to the contrary, and frees employers to make good faith efforts to get noncompetition agreements in place with existing at-will employees (where appropriate) without the need to offer those employees additional compensation or benefits in exchange for their signing a noncompetition agreement.

The case is Lucht’s Concrete Pumping, Inc. v. Horner, decided May 31, 2011. It involved Tracy Horner, an at-will employee hired by Lucht’s in 2001. Horner signed a noncompetition agreement with the company in 2003, two years after his date of hire. When he resigned from the company in 2004 and began to work for a competitor, Lucht’s sued him, in part, for breach of the noncompetition agreement.

Implicit in the at-will employment relationship is the employer’s right to terminate an employee at any time, and the employee’s corresponding right to quit at any time. As one court put it, “[a]s a practical matter every day is a new day for both employer and employee in an at-will relationship.”¹ Because an employer may terminate an at-will employee at any time, the Colorado Supreme Court concluded that an employer’s restraint from terminating an employee is the forbearance of a legal right. And, this forbearance constitutes adequate consideration to support a noncompetition agreement signed by an existing at-will employee.

Presenting an existing at-will employee with a noncompetition agreement is in essence an offer to renegotiate the terms and conditions of the employee’s employment. In exchange for signing the noncompetition agreement and accepting the new employment terms, the employee receives the ability to continue his or her employment because the employer refrains from exercising its lawful right to terminate the employee. But the Colorado Supreme Court warned against employers seizing this as an opportunity to have an existing at-will employee sign a noncompetition agreement only to terminate that employee shortly thereafter. An at-will employee’s continued employment is not sufficient consideration if the employer acts in bad faith by terminating the employee shortly after (s)he signs the noncompetition agreement.

Employers must remember that noncompetition agreements are void in Colorado unless one of four exceptions applies. C.R.S. § 8-2-113(2). One exception allows for noncompetition agreements with “executive and management personnel and officers and employees who constitute professional staff to executive and management personnel,” while another exception applies to contracts for the protection of trade secrets. While an at-will employee’s continued employment may now be sufficient consideration for a later-signed noncompetition agreement, any noncompetition agreement must still satisfy one of the four exceptions, and must always be reasonable as to geographic scope and duration.

¹Copeco, Inc. v. Caley, 632 N.E.2d 1299 (Ohio 1992).

S. Kato Crews is a Partner with Mastin Hoffman & Crews LLC. He is a litigator representing businesses and professionals in a range of legal disputes, with particular experience defending employers against a variety of employment-related claims, and representing construction professionals, developers, and owners in commercial and residential construction disputes. Mr. Crews can be reached at 303.217.4876, or by via email at crews@mastinlaw.com.

When school lets out for the summer, many students will take advantage of on-the-job educational opportunities as interns. Some will have the good fortune of working paid internships. Others will sacrifice their summer fun for unpaid positions with zeal for the learning experience and the opportunity to earn a few college credit hours. As employers prepare for the arrival of their summer interns, it is imperative that they understand the legality of unpaid intern positions. The key is in distinguishing between a “training” versus an “employment” relationship.

Both the federal Fair Labor Standards Act (“FLSA”) and the Colorado Minimum Wage Order (for Colorado employers) require that employers pay employees at least minimum wage (state or federal minimum wage, whichever is higher, when both laws apply) for all hours worked. The FLSA covers most employers with two or more employees that are engaged in interstate commerce; the Colorado Minimum Wage Order applies to private sector employers in Colorado engaged in the following four industries: retail and service, commercial support service, food and beverage, and health and medical. The Colorado Minimum Wage Order exempts “students employed in a work experience study program” from its requirements, but it does not specifically define this category of worker. Similarly, the FLSA exempts “trainees” from its requirements.

The U.S. Department of Labor (“DOL”) has developed six criteria to determine whether a worker is a “trainee” who may perform work for an employer for free. These criteria are useful in considering the Colorado Minimum Wage Order’s exemption for “students employed in a work experience study program.”

In considering whether a worker is a “trainee” for FLSA purposes, the DOL considers the following six factors:

1. Even though the training includes actual operation of the facilities of the employer, it is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the trainee’s benefit;
3. The trainee does not displace regular employees, but works under their close observation;
4. The employer derives no immediate advantage from the trainee’s activities and, on occasion, the employer’s operations may actually be impeded;
5. The trainee is not necessarily entitled to a job at the conclusion of the training period; and,
6. The employer and the trainee understand that the trainee is not entitled to wages for the time spent training.

While the DOL uses these factors to evaluate whether a worker is a “trainee” exempted from FLSA requirements, they are useful and applicable in considering whether a worker is a “student employed in a work experience study program” for purposes of being exempt from the Colorado Minimum Wage Order. As with most wage and hour issues, the fact that an employer labels a worker as an “intern” or “trainee” is not conclusive—rather, the presence of the DOL’s six factors among the facts associated with the actual working relationship between an employer and worker will determine whether the worker is lawfully classified as an unpaid intern. A written agreement between the employer and worker that tracks these six factors, though not conclusive, helps to evidence and clarify the training relationship between an employer and intern.

The DOL’s six-factor test helps in distinguishing between a “training” versus an “employment” relationship. If a training relationship exists based on the DOL’s six-factor test, then the worker is a “trainee” or “student employed in a work experience study program” and exempt from the FLSA and Colorado Minimum Wage Order. In those circumstances, an employer may lawfully offer an unpaid internship. The “trainee” exemption should not be confused with the exemption for “volunteers,” which involves a different set of criteria not addressed here.

S. Kato Crews is a Partner with Mastin Hoffman & Crews PC. He is a litigator representing businesses and professionals in a range of legal disputes, with particular experience defending employers against a variety of employment-related claims, and representing construction professionals, developers, and owners in commercial and residential construction disputes.   Mr. Crews can be reached at 303.217.4876, or by via email at crews@mastinlaw.com.

Review more details here.

Review more details here.

PROGRAM HIGHLIGHTS:

• A Four-Subject Primer
• Annual Tax Update
• Governance/Best Practices
• Employment Law – New Applications and Interpretations in
• Response to Changes in the Workplace
• State and Local Tax Issues of Importance to Nonprofit
• Organizations and Their Donors
• Innovative Educational Models To Meet Challenging Needs
• Religious Organizations: Governance Structures and Unique Tax Issues
• Religious Organizations: The Epic Confrontation Between the
• Anti-Discrimination Principle and the Association Principle
• Religious Organizations: Child Abuse Reporting and Pastoral Confidences
• Private Foundations: Rules, Restrictions and Opportunities
• Developments at the Federal and State Level Affecting Exempt
• Health Care Organizations
• Affordable Housing

VIDEO REPLAYS:
PRIMER: JUNE 2, 2011
INSTITUTE: JUNE 3, 2011

VIDEO REPLAY LOCATIONS:
Denver
Colorado Springs
Grand Junction

CLE CREDITS:
PRIMER: Submitted for 4 General Credits
INSTITUTE: Submitted for 8 General Credit

Colorado’s Mechanics’ Lien Statute (C.R.S. § 38-22-101 et seq.) affords construction contractors and suppliers some measure of protection against non-payment for their materials and labor on a construction project. It allows them to encumber property with a lien for the value of their services that remain unpaid. The Mechanics’ Lien Statute contains very specific requirements that a construction professional must follow to a “T” when attempting to encumber property with a mechanics’ lien—thus, the process of recording a lien and completing the necessary paperwork should not be taken lightly. Moreover, it is important for construction and supply companies to understand when their corporate officers may risk personal liability under the Mechanics’ Lien Statute. Colorado courts have held that certain corporate officers may be personally liable when their company fails to disburse construction funds to subcontractors and suppliers, but are not personally liable if their company is found to have recorded a lien with an inflated dollar amount. The latter is the result of a recent appellate court decision.

Liability for Failing to Disburse Funds to Subcontractors and Suppliers

The Mechanics’ Lien Statute imposes a trust on the funds disbursed to a contractor for payment to subcontractors and suppliers. C.R.S. § 38-33-127. This provision of the law, known as the “Trust Fund Statute,” requires that “[a]ll funds disbursed to any contractor…under any building, construction, or remodeling contract or on any construction project shall be held in trust for the payment of the subcontractors, laborer or material suppliers… .”

The usual case in which the Trust Fund Statute becomes an issue is when an owner, or lender disbursing construction loan funds, pays a general contractor pursuant to a pay application or draw request that includes amounts for services provided by subcontractors and suppliers. Rather than paying its subcontractors and suppliers with those funds, however, the general contractor uses those funds to satisfy other of its financial obligations or to pay subcontractors and suppliers on other projects. This inevitably leads to the recording of mechanics’ liens by the unpaid subcontractors and suppliers.

In this situation, Colorado courts have held that corporate officers who control the general contractor’s financial decisions are charged with knowing the obligation of a contractor to hold the payments it receives on a project in trust for payment to subcontractors and suppliers. When the general contractor diverts those “trust funds” to other obligations, the corporate officer who controls the company’s finances can be held personally liable for breach of trust to the unpaid subcontractors and suppliers, or to the property owner or bank that paid the general contractor. This is because the courts interpret the Trust Fund Statute as imposing a fiduciary duty on the corporate officer who controls the company’s finances to appropriately disburse construction funds consistent with the obligations under the Trust Fund Statute.

Liability for Recording an Excessive Lien

In a recent decision from the Colorado Court of Appeals, residential homeowners attempted to hold a general contractor’s corporate officer personally liable for the homeowners’ costs and attorney fees incurred in establishing that the general contractor recorded an excessive lien. The Mechanics’ Lien Statute provides that “[a]ny person who files a lien…for an amount greater than is due without a reasonable possibility that said amount claimed is due and with the knowledge that said amount claimed is greater than that amount then due…shall forfeit all rights to such lien plus such person shall be liable…in an amount equal to the costs and all attorney’s fees.” C.R.S. § 38-22-128 (the “Excessive Lien Statute”) (emphasis added).

The homeowners argued that the Excessive Lien Statute imposed liability on a corporate officer similar to the liability of a corporate officer under the Trust Fund Statute. But the appellate court disagreed. It concluded that a corporate officer’s obligations under the two laws differed—the Trust Fund Statute imposes a fiduciary duty on a corporate officer who controls the company’s finances, but there is no similar duty that arises under the Excessive Lien Statute. Additionally, the court reasoned that the Trust Fund Statute contains no language limiting liability solely to the corporation that receives construction funds. By contrast, the Excessive Lien Statute specifically limits liability to the “person who files a lien,” which the court concluded is the corporation and not a corporate officer individually.

Because of its many technical requirements and other provisions which may expand a contractor’s liability, or the personal liability of corporate officers, Colorado’s Mechanics’ Lien Statute is a potential minefield for the unwary. It is imperative that construction professionals review and understand its various provisions in order to get the most out of the statute as a vehicle for securing payment for the work they perform.

S. Kato Crews is a Partner with Mastin Hoffman & Crews PC. Mr. Crews is a litigator representing businesses and professionals in a range of legal disputes. He has particular experience defending employers against a variety of employment-related claims, and representing construction professionals, developers, and owners in commercial and residential construction disputes. He has successfully prosecuted construction defect claims to verdict as lead trial counsel, and has represented clients in both jury and bench trials involving an array of civil disputes. Mr. Crews can be reached at 303.217.4876, or by via email at crews@mastinlaw.com.

Christine Mastin has been named as a Rising Star in the area of Immigration Law. This is her third year in a row being named by Colorado Super Lawyers magazine as a Rising Star. Kato Crews has been named as a Rising Star in the areas of Employment and Labor Law. This is also his third year in a row being named by Colorado Super Lawyers magazine as a Rising Star.

Rising Stars is a designated list selected by Super Lawyers magazine of the state’s top up-and-coming attorneys—those who are 40 years old or younger, or who have been practicing for 10 years or less. Each year, the research team at Super Lawyers undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by the attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check.

The objective is to create a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource for attorneys and consumers searching for legal counsel. No more than 2.5 percent of the lawyers in the state are named to the Rising Stars list.